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Breaking down the First Home Super Saver Scheme

Paul Benson is the Principal Financial Planner at Guidance Financial Services. With over two decades of experience in the financial advisory industry, Paul has helped countless clients achieve their financial goals, including saving for their first home deposit.

In this episode, we’ll be discussing the big challenge that many first-home buyers face – the deposit. Paul will share some common mistakes people make when trying to save for a deposit, and how to avoid them. He’ll also explain how investing can be a powerful tool in helping you save for your deposit, before sharing his top tips on how to get started. Plus, Paul gives his insights on a government scheme that could potentially help first-home buyers increase their savings.

Paul Benson is the Principal Financial Planner at Guidance Financial Services. With over two decades of experience in the financial advisory industry, Paul has helped countless clients achieve their financial goals, including saving for their first home deposit.

In this episode, we’ll be discussing the big challenge that many first-home buyers face – the deposit. Paul will share some common mistakes people make when trying to save for a deposit, and how to avoid them. He’ll also explain how investing can be a powerful tool in helping you save for your deposit, before sharing his top tips on how to get started. Plus, Paul gives his insights on a government scheme that could potentially help first-home buyers increase their savings.

Episode Outline

00:00Disclaimer 00:16Introduction 01:18Getting to know Paul Benson 02:02How did he get to financial planning 04:51Learning more about Guidance Financial Services 05:24First home buyers’ common mistakes when saving for deposit 07:55Investment strategy tips for first home buyers 09:44Common mistakes when investing to save up for a deposit 11:07Tips for those new to investing 12:33Is it better to rely on digital apps or to consult a financial planner? 14:21Off-the plan investments: A good investment strategy? 17:09Depreciation 18:48Supersaver Scheme 26:04Can the Self-Employed Avail the Supersaver Scheme? 26:34Paul Benson’s no. 1 tip for first home buyers trying to build their deposit 23:36What are the qualifications of a good property inspector 26:44If you have $10,000, where would you invest it in? 28:29Get in touch with Paul Benson

Show notes

Paul Benson is the Principal Financial Planner at Guidance Financial Services. With over two decades of experience in the financial advisory industry, Paul has helped countless clients achieve their financial goals, including saving for their first home deposit.

In this episode, we’ll be discussing the big challenge that many first-home buyers face – the deposit. Paul will share some common mistakes people make when trying to save for a deposit, and how to avoid them. He’ll also explain how investing can be a powerful tool in helping you save for your deposit, before sharing his top tips on how to get started. Plus, Paul gives his insights on a government scheme that could potentially help first-home buyers increase their savings.

Get in touch with Paul Benson

Guidance Financial Services
Phone: (03) 9870 6544

Financial Autonomy Podcast


Michael Nasser 0:00
The information contained in this podcast is general in nature and is not to be taken as financial or personal advice. It does not consider your objectives, financial situation or needs, you should consider whether this information is suitable for you and your personal circumstances before acting on it. Hi, and welcome to the home run your guide to buying your first home in Australia. On the show, I’ll walk you through the home buying process from every angle. We cover the steps to take the pitfalls to avoid, and the answers to all your questions you’ve been dying to ask. No matter what stage you’re at, you’ll learn everything you need to know about buying your first home. I’m your host, Michael Nasser, and I’m a mortgage broker at Lendstreet and I really love helping people buy their first home. Today, I’m joined by Paul Benson, the principal financial planner at guidance, financial services, a financial advisory company that covers superannuation, investments, insurance, financial modeling, and much much more. In this episode, we’ll be talking about the big barrier a lot of first-time buyers deal with the deposit, you’ll hear about some common mistakes that people make the role investments can play in saving your deposit and Paul will share a government scheme that could help you increase your savings. Let’s jump in. Welcome to the episode today Paul, thank you for joining us.

Paul Benson 1:21
Hey, Thanks, Michael. Thanks for having me along.

Michael Nasser 1:23
Let’s start off by getting to get to know you a bit better. Tell us a bit about yourself, your professional background, and how you got to where you are today.

Paul Benson 1:29
So I’m a financial planner. I’m the owner and the practice principal of guidance, financial services, and also host a podcast as well called financial autonomy. I’ve been in financial planning for sort of 20 odd years. Our practice here as a team of five, most of our clients are sort of 40 to 50 kind of age bracket generally sometimes a bit younger, though some clients in their 30s and I guess most of our clients come to us via our podcast, which is financial autonomy. So therefore there tends to be a bit of a focus around financial independence, that sort of thing. So that tends to be the sort of clients that we largely work with.

Michael Nasser 2:02
How did you get into it? Like, is it something that you just fell into? Or were like, how did you get into financial planning? So.

Paul Benson 2:07
back in high school, we had work experience, which of course still happens today and I was always interested in the stock market. My grandfather used to own a few shares and used to talk about them sometimes, and always found that pretty interesting. So when work experience came up, I got work experience at a stock broking firm, and back then showing my age a bit. But at the time, the stock market, it still had the guys down in the pit yelling and screaming at each other that you see in the movies, which these days doesn’t happen, because it’s all on computers but back then that was still the case and so while the work experience, I was in there, running messages from people taking orders on the phone, from back at the stockbrokers office, and then going and finding our guys and handing them the messages and it was a fantastic experience and lots of energy and excitement and so right from high school stage had that interest in in investing in a particular stock market. Out of school I got into I worked for other big banks and I did a degree at night, which they sponsored me through, which was great and so I did a few different roles there. I mean, initially in the branches, but then in a couple of different roles in the head office sort of area. And eventually, yeah, having done a few roles, and I guess perhaps a little bit of maturity, in my late 20s had a bit of a look around wasn’t really enjoying the role that I was in, even though it was kind of the role that I’d aspired to for quite a long time. But once I got there, I realized it was kind of just doing spreadsheets all day. And so had a bit of a look around. And the benefit of working for a big organization, of course, is that there is lots of opportunities for you to jump sideways to try out different things. And so I guess I circled back to well, I’ve always been interested in investment and and I saw the financial planning role there. And at that point, the banks were prepared to train you. And as I say, that already kind of invested in me a bit because they’d sponsored me through a degree. So I stuck my hand up for a role and I remember in the interview saying to them, Well, look, I’ve decided that financial planning is a good fit for me for my skill sets and my interests. And so I’m just going to apply for every one of these jobs that you advertise until you give me one obviously, that was a pretty good threat, because they gave me the first one I applied for. So I worked as a planner there for seven years left in 2006. There’s some issues with financial planning in the banks, which of course come out in the last few years and so that was some of the reasons that I left, you know, sort of salesy type culture that didn’t sit very well. But nevertheless, it was a good apprenticeship and 2006 then got out on my own, and I’ve been running my own show ever since.

Michael Nasser 4:26
And that would have been just pre GFC so the GFC would have hit a couple of years later, and.

Paul Benson 4:30
It was pre GFC. So yes, good observation. In that sense. It was an awesome timing, but I don’t know. I mean, if I had still been at the bank, yeah, I don’t know quite how that would have played out. I mean, some people definitely got laid off. I like to think I probably would have got through that but I just would have wasted more years. It was alright. It certainly the GFC period did have some challenging aspects, but we got through okay.

Michael Nasser 4:52
And then obviously guidance financial services came about and so tell us a bit more about that.

Paul Benson 4:56
There was founded by another gentleman back in 1999, and they And I actually bought that off him in 2008, a couple of years where I sort of operated under him as a self-employed contractor but that gave me the ability to just see the business and see how it works and meet some of the clients and so yeah, he decided he wanted to exit so I bought him out in 2008 so the business has had a bit longer run than my ownership period but certainly, at this point, I’ve owned it for the majority of its life.

Michael Nasser 5:24
We obviously deal and speak a lot to first homebuyers and one of the biggest challenges that first homebuyers face is trying to save enough money for their deposit. What are some of the common mistakes that first homebuyers make when trying to save that you’ve seen?

Paul Benson 5:36
So you’ve got a couple of things to balance up, right. And interestingly, we just did a I just presented a strategy to a client yesterday, I think or the day before, where the objective is right out in three years. He wants to be able to buy a house and how are we going to get there. So this is definitely a live issue for some of the clients that we work with, you’ve got a bit of a juggling act, because I mean, it was the first time guarantee the government scheme that enables you to potentially get a home loan with only a 5% deposit. But what we often find with this, and Michael, I’d be interested in your experience, because particularly in Sydney, you might see this even more is that it’s all very well to get a 5% deposit, but you still got to get a loan big enough to be able to afford to buy the property and you’ve only got a 5% deposit, then obviously, that means you’re borrowing 95% of the value of the property. And there’s only a certain amount that the lenders will give you based on your income. And so what certainly in this case that we’re working on just recently, sure, as a first time owner, he could potentially access that 5% If he could, I mean, there are limited spots, Michael, you’re probably across this more than I am. But it didn’t really help because his target purchase price was 600,000 and with only a 5% deposit the size of the loan that he would have needed. Well, he couldn’t get it anyway so deposits pretty crucial. Even if you can access the government schemes and get away with a little deposit. Often that doesn’t do the trick anyhow, in our experience. So therefore it takes time, I guess is the number one step. Most people would commit to Alright, well, I’ve got $2,000 a month that I can afford, disable might be a couple. And therefore they’ll put that into some sort of investment. And progressively build that way is typically the way it happens. I guess there’s always an impatience. And there’s a wish that I wish it was there tomorrow or whatever. But you do just have to take this will Alright, I’m going to set myself up so that I can buy a house in whatever three years, whatever the relevant timeframe, and then you start making steps towards that progressively. It’s not something that you can wake up typically one morning and just decide, all right, I’m ready to go, let’s do this whole home buying thing.

Michael Nasser 7:31
It’s definitely a process and a strategy, I think is the key thing. So you’ve mentioned there that in this instance, with your client, you know, there’s a three-year strategy in place to get them to where they need to be to purchase and yet the 5% deposit scheme is good, obviously and we’ll speak to that a little bit later on, and the benefits to it and how it actually works. But on the counter of that you’ve got to have the borrowing capacity to borrow the 95%. And that’s the juggling act that needs to be played out. But back to the strategy, are there any investment strategies that can help first homebuyers save their deposit, or even say a bit quicker?

Paul Benson 8:01
Depends on your timeframe. So if your timeframe is relatively short, so certainly less than a year, maybe even less than two years, then your strategy would just be to build up cash in the bank somewhere wherever you can find the highest interest rate. But you can’t get any more sophisticated than that because as we’ve seen in 2022, if you go into investment markets, sometimes they go down, and I’m not just talking about the share market here, the bond market went down more than the share market last year, which doesn’t happen very often. But that’s the case. So you can’t really do anything beyond cash unless you’ve, you really need at least a three year timeframe. But if you have that timeframe, then yeah, you could potentially do some sort of balanced investment, not dissimilar to perhaps where you’ve got your superannuation invested and you could add to that every month, over that sort of timeframe, some years will be better than others, you know, it’s the return is not certain. But then again, cash in the bank, and the interest rates a lot higher now than it was 18 months ago. So that moves to, but I guess there’s more variability if you go some sort of balanced fund or something along those lines. So certainly that’s possible, it works. Well, if you’re going to add to it on a monthly basis. Typically, some people are in jobs where they maybe get bonuses every now and again. So they might get some lumps. So they could always top up with those lumps. But the progressive investment works well but as I say, really, you need a three year timeframe, the longer the better.

Michael Nasser 9:18
I like the fact that you’ve actually sort of put a number to that as in three years, we generally can help in terms of building a deposit with some effective strategies. And and I guess with being a financial planner, there are other investment strategies that can come into play that the average just saving mechanism doesn’t always I guess account or or might slow that process down. Obviously the risk involved as with anything, but that’s where you come in to try and help mitigate that, I guess and provide the best possible strategy for the individual. Do you see any common mistakes when people start investing to try and sort of save that deposit?

Paul Benson 9:50
Usually, it’s more just a common mistake of starting to invest in full stop rather than necessarily as a deposit but it’s looking at short term market movements. and sort of extrapolating that out or thinking that’s the norm. So like last year, as I say, bonds went down now that’s very, very rare. I think the last significant time bonds went down was 1994. So it doesn’t happen very often but I had someone email me the other day and say, I’m thinking we should get out of the bonds portion of my portfolio. And essentially, she’s arrived at that conclusion based on a sample size of one year, and not a very representative one year. And you get that with all asset classes, with shares with property, etc, that sometimes people will just look at a single year and go, Oh, well, that wasn’t very good. So I need to make a change, when actually, year to year returns very, and what we’re trying to get as a satisfactory average over a period of year and so placing too much weight on any individual year and how that particular one unfolded. That’s usually where people make a mistep and it could be the other way, too, right? It could be that your shares, I had a bumper year and we’re up 20%. So therefore, someone concludes, oh, this is awesome. I’m going to max out the credit card and buy shares or something stupid like that, because it just looked at one year, but doesn’t tell you a lot, you know? So I’d suggest that that’s probably the most common mistake that I see.

Michael Nasser 11:07
And what tips do you have for people who are just starting with investing?

Paul Benson 11:14
it can be hard to get started particularly depends on you as an individual, but a lot of people will be a little bit fearful of investing because of the volatility aspects. I mean, they know if I put $1,000 in the bank, and in a month’s time they go and look at it, they’ll still be $1,000 in there. But if they invest $1,000, and they look at it in a month’s time, it might be $950. Or it might be $1,050. Now, even that’s a pretty big move in the space of a month. But nevertheless, you get the point, right, it moves around. And some people find that disconcerting, totally, understandably, I mean, a good strategy is as soon as you’re able to try and get some experience up with it, there are some fantastic apps like this raise as well. One, there’s one called concept pocket, I’m sure there’s plenty of others around but ones that that you invest quite small amounts of money, perhaps 100 bucks and this sort of stuff, get in there, get a bit of experience with something like that, if you can just get the feel for the ups and downs and just get confident and I went down that month, but or the next month that went back up again and I just think once you’ve had that experience, it really then sets you up to be a lot more confident that all right, I can do 2000 bucks a month, or whatever the your affordability is in terms of savings. And I can sleep at night, which of course is the challenge. So depending on where you are in your journey, but just try and get experience even with a relatively small amount of money and just get to know how investment markets work.

Michael Nasser 12:33
Yeah, and I guess the obvious other tip would probably be to reach out to professionals like yourself, or someone that knows what they’re doing and not try to do it yourself. Like do you see that a lot where people might think that I can download this app and do it myself and then they go, and before they know it, they’re probably dug themselves into a little bit of a hole and.

Paul Benson 12:48
Unfortunately, the legislative environment that financial planning operates in within Australia means that it’s not cheap to get advice. We live in a bit of a nanny state world. And so we’re required to jump through a lot of hoops and do a lot. And so sometimes when you’re getting started to be frank, it’s probably not very cost effective to get one on one personal advice. So the digital solutions likely are a really cost effective way to get started. And certainly as you go along the journey a bit and as your career progresses. And I guess, too, as your life gets more complex, you know, once maybe there’s kids on the scene, and yeah, perhaps it is when you’re taking on a mortgage or taking on debt, career developments, that sort of stuff, then you’re likely to see more value out of obtaining one on one advice from a financial planner and, and therefore, the cost is more likely to be justified.

Michael Nasser 13:35
There have been a lot of change changes. I know, it’s a little bit off topic in terms of the financial planning industry as a whole and the changes that have occurred in the last couple of years. But I you know, sort of very aware of lots of financial posts and are no longer in the industry because of the rules and regulations have now come into play. So it definitely makes the whole experience I guess a little bit more challenging for people trying to obtain services, but also for you, I guess.

Paul Benson 13:55
The good thing is, particularly the banks are no longer providing financial planning advice, which is largely a good outcome because as the Royal Commission found it’s just inherently conflicted, right? They’re they’re just trying to sell product. So that’s been really good. And so when people go and talk to a financial planner, now they can be much more confident that they’re getting good quality, impartial advice. The flip side of that, though, is there’s not so many financial plans so that’s the balancing act.

Michael Nasser 14:21
Something that I get asked a lot and I’m curious to know your opinion is off the plan purchases as investments, do you think they’re a good idea or not?

Paul Benson 14:28
Not? There’s only one person I’ve ever spoken to where buying off the plan as an investor has been a good outcome for them. I think it’s because normally built into the price is a pretty fat commission for some sort of salesperson so that you end up actually paying a bit more than actually should. The other piece is that properties were out and just like a car, you know, you buy a car, it’s got that new car smell. It’s worth a bit extra when you first buy it but as soon as you drive it out of the dealership that value drops. I think properties have a little bit of the same as well. There’s a premium brand In spanking new, which is interesting because off the plan is normally apartments and actually, normally in the first few years, there’s all sorts of defects and the roof leaks in the carpark doesn’t work and being in there when they’re brand new is a nightmare. So it’s interesting that new has a premium at all. But nevertheless, it seems to I guess the building looks nice from the outside. And so you tend to get very little growth, you pay a pretty full price, because there’s some sort of sales commission built in. And the only saving grace is you do tend to get a fair bit of depreciation. So potentially, if you’re on a top marginal tax rate, or a fairly high marginal tax rate, the depreciation might work for you. But even then, you’d really want to be in there for a pretty long period of time. So anyway, look, that’s my experience, I think it’s different if you’re buying to live in, because then it’s about lifestyle and location and that’s just a different equation. But as an investor, which is more where I’ve seen it, you haven’t seen a lot of good experiences there. I mean, what’s been your experience, Michael, you would have seen a lot of those.

Michael Nasser 15:55
that was going to repeat almost the same thing, almost word for word. So the sentiments are same. I mean, I generally advise anyone to stay clear what the plan established, not only do you have the factors that you’ve mentioned, with regards to the defects, and that’s been pretty publicized, you know, the last couple of years and all that sort of stuff, but it’s the fact that you don’t know when it’s going to be ready and how it’s going to be ready. And, you know, you’re buying it off pitcher and the amount of clients that we you know, worked for pre approvals, for example, and then sunset that it gets extended, and it gets extended again. And so you know, it’s a matter and then eventually, maybe the building doesn’t even go ahead, and they’ve been in since with that happens, and so you’re waiting two or three years, and it’s like, well, hold on, here’s your deposit back. So there’s a lot of, I guess, areas of improvement there or that can be approved. And I think if you buy established, you at least are aware of what’s there and what the defects have been. There’s a history, there’s a sales history, there’s a lack of generally stock. And so I guess from the fundamentals of it, where we’re not forward as well. And I guess it’s died down probably the last couple of years, but a couple years ago was quite a popular Avenue where people were sort of looking to invest, again, thinking that we bought now and then maybe in three or four years time, it’s going to be worth a lot more. But I guess there are heaps more complexities to think about.

Paul Benson 17:00
Yeah, and I’m still I’m sure it works. For some people, there must be I have come across one person that it did work for. So it’s not impossible, but in my experience, it’s been rare.

Michael Nasser 17:09
Paul, you mentioned depreciation, that’s a term that we hear a lot of but can you explain exactly what that is? When it comes to investment properties?

Paul Benson 17:15
Yeah, sure. So it’s trying to pick up the fact that physical assets wear out. So if you take, for example, the carpets, they might have a 10 year or 15 year life until they’re worn out. So from a tax point of view, what you’re able to do is say, all right, and they don’t do it to this level of granularity. But that’s just take this as a way to get your head around it. If you said, Alright, the carpets cost 2000 bucks, you divide that cost over 15 years, and then every year, you can deduct 115 of that cost off your tax. They’re doing that for everything in the apartment, right? So depreciation is trying to pick up for the fact that properties were out. And so you tend to when you’re buying investment property, if it’s brand new, there’s quite a lot that can be depreciated. Different things have different time periods. And anyway, there’s a bit of detail that goes into that. But the point is, it’s giving you a tax deduction, reflecting stuff wearing out.

Michael Nasser 18:09
Okay, I guess I guess so for the purposes of it’s a tax sort of clay, eventually that can be had on an investment property.

Paul Benson 18:15
Yeah and it reduces over time, right? Because eventually, you’ve depreciated things down to zero. And then that’s it. And the thinking is, well, at that point, it’s worn out, and you’ll probably need to buy a new whatever the thing was, but in practice, often people don’t. But anyway, that’s the thinking,

Michael Nasser 18:29
jumping topic a little bit and wanting to focus a little bit on the home, the first time Super Saver scheme. We did allude to it a little bit earlier on. So the government is often trying to find out few schemes to help first-time buyers get into the market. On the past on this show, we’ve said to be careful about these schemes, but one I wanted to ask you about is this first homebuyer Super Saver scheme? Can you tell me a bit more about that?

Paul Benson 18:50
Yeah, I think this is, you know, for your listeners, probably the most important thing to be aware of if you’re thinking about saving for a deposit. So it’s interesting scheme. So you make extra contributions into your super so over and above what your employer compulsorily contributes and normally, you would do that by salary sacrifice, say to your payroll, people, alright, I’m going to salary sacrifice $1,000 amounts just as an example. So that’s extra going into your super, and then that builds up and then when you get your super statement, it doesn’t sort of hold that out as a separate piece or anything like that. It’s just all part of your super, but the ATO keeps track of it. And the joys of myGov these days is that we can log in and you can actually see what you’ve got available. And yeah, they’ll do an assessment for you. And then after you’ve built it up, typically over several years, you can apply to the tax office to have that released, and then the Tax Office issues a letter of sorts, that authorizes the superannuation fund to release the money that you’ve deposited in there extra, and then you’ve got 12 months to use that as a deposit. It’s attractive because, as I mentioned, your salary sacrifice typically to get the money in there in the first place. And when your salary sacrifice your money is going in there before it’s had any tax deducted. So, you know, if you’re normally on a 30% tax rate, which is sort of the middle of the road tax rate, if you weren’t $1,000, normally, tax gets taken out, and you end up with $700 in your pocket. So if you were trying to save your deposit, that $1,000 that you earned, you’ve only got $700 in your savings account. But here, the $1,000 go straight across to super right. Now, when it hits the Superfund it does get taxed at 15%. So there’s some tax, but it’s still that’s half what you would have paid. And then it’s earning within the Superfund and it doesn’t get taxed very much on its earnings either better than you would as an individual. So there’s some tax savings available to you by making use of this scheme. Now, there are some limits around it. And we really got to make sure we cover these off. So in total, the maximum amount you can ever take out of this first homeowner Super Saver scheme is $50,000. The other key limit is the most you can put in in a single year is $15,000. So it’s usually a three year type proposition to get you towards three years to 15 gets you to 45,000 right? so it’s thereabouts. Now you might from an affordability point of view, you might only be able to do 7000 a year or something in which case, you can take more time to get there. But 15,000 is the max per year of voluntary contributions that you can put in and 50,000 is the maximum you can get out. The other thing just with those contributions, is quite aside from first homeowner Super Saver scheme, the maximum that any of us can put into super tax deductible type contributions, which is what almost all of them are, is $27,500. Now that includes what your employer puts in. So if you’re on a wage of 150,000, let’s say, then your employer is putting in a bit more than $15,000 is 10 and a half percent. So that means you’ve only got 12 odd $1,000 of headroom within that normal contribution cap. So even though, under the first homeowner Super Saver scheme, you know, they say, well, you can’t do more than 15,000 in a year. That’s all well and good. But actually, within your normal contribution limits, you might not have that amount of headroom anyhow. Because you can never go over 27 and a half, including what your employer puts in. So this is where individually, you need to kind of work it through. It’s not just a black and white, copy what your next door neighbor did type scenario. But yeah, it’s a great scheme, one to do over multiple years, if you’re not already getting into your myGov. And I know it is a bit of a pain to set up initially and do all your ID but once you’ve done that, that’s the way you can track it, you can get into myGov and it’ll be able to calculate for you how much you’ve got available, because you do get some earnings on the money you put in as well. So it grows a little bit. But yeah, look, it’s a fantastic scheme. And for any first time buyer, looking to save a deposit, which of course is the topic of today’s discussion, that would usually be first port of call, when you’re thinking about how to do this the best way.

Michael Nasser 22:52
That’s quite insightful in terms of how it works. And I think you made the explanation quite simple. I mean, obviously, there are a few caps to be mindful of being the 27,500 max that you can put in and the 15,000 per year and managing out that and obviously you’re getting some, I’m sure there’s some public calculators online that can assist you, you figure that out as well, in terms of what that potentially looks like for you and using the $50,000. I guess when it comes to drawing it out? Is it something that just gets deposited back into an account? And then you use that 50,000? What would that need to go straight to the purchase settlement?

Paul Benson 23:22
Yeah, it goes to your account, and you’ve got 12 months to put it towards a deposit. So it’s pretty flexible, I understand that it is actually even possible. If for some reason your settlement gets delayed, you can apply to the ATO and get a bit of an extension if you need it. But anyway, the default is take it out, and you got to use it within 12 months. And if you don’t, then you get hit with this sort of extra tax, right. So it’s not the end of the world, but no one likes to pay extra tax. So you try not to do that, if you took it out for the deposit. And then it turned out that the House purchase that you’ve had expected didn’t happen, you could put it back into super. And I believe there’s a mechanism to let the ATO know that you didn’t do it, and then you’ll be able to do it again. Because the thing with the first homeowners scheme is you can only ever use it once. Which makes sense because it’s intended as a first time right? If you did take it out and then the house purchased didn’t happen and you put the money back in, you just got to make sure that the ATO is tracked that accurately, so that they know that you are able to do that again down the road.

Michael Nasser 24:17
And I guess sort of from a mortgage brokers point of view, when you’re a first time buyer, you’re gonna have to demonstrate genuine savings. And you may or may or may not be aware can that $50,000 be used as part of that genuine savings story to a bank?

Paul Benson 24:28
You would know better than me, Michael, but I would have thought so you can definitely demonstrate on your superannuation statement that there’s X amount being salary sacrifice there every month,

Michael Nasser 24:36
I would think so as well, I guess I certainly want to check out because that’s something that can stamp out a few first time home buyers, but that might be a workaround if that’s the option that you decide to go down. But again, that needs to be planned out. You can’t do it this year. It’s got to be the additional soup needs to be in there. And it needs to be at a size which is going to contribute to your deposit amount which we also started talking about earlier on in terms of making sure that the deposit is one component. And obviously then the borrowing is another so I guess your opinion of the whole scheme? Positive, negative, neutral?

Paul Benson 25:04
Definitely positive. If you’re going to buy a house in six months or something, then not really. But if your timeframes three years or something, or even a couple of years, it’s probably still worth doing. But ideally three years plus, it’s great.

Michael Nasser 25:17
And I guess just the question that’s come to mind, you mentioned that without this is relating to the first home Super Saver scheme. If that $10,000 was to land in your lap, you couldn’t put that in as an additional payment to your super fund to go and it doesn’t have to come from your employer? Or can it come from another mechanism?

Paul Benson 25:31
Yeah, you could, you could put it in as a personal concessional contribution and claim a tax deduction for it.

Michael Nasser 25:37
And could that go to the home? supersaver?

Paul Benson 25:39
It could, again, you’d have to make sure you haven’t your contribution cap at 27 and a half 1000, including what potentially you could you could do a lump sum, that’s probably even more relevant for a self-employed person where they’re probably not doing super guarantee. But even as an employed person, you could Yeah, so you could put a lump sum in climate as a tax deduction. And then that would qualify for the ability to release it for the first time on a Super Saver scheme. Yes.

Michael Nasser 26:04
If you are self-employed, and you do pay your own super, do you have this scheme to avail as well? Or is it not available to soften? Boy?

Paul Benson 26:10
Yeah, you do? Yeah. As a self-employed person, if it’s not Superannuation Guarantee, then yeah, whatever you’re putting in there, you can get back out so yeah, in some ways, it’s a bit more flexible for self-employed people

Michael Nasser 26:21
understood it, you know, got that $10,000 And you’re self-employed, you might just pack it into your if it will, the caps or Okay, paternity super and use it as part of deposit and a couple years time. We always close our interview with two questions. The first one, what’s your number one tip for first home buyers trying to build their deposit?

Paul Benson 26:39
Make use of the first homeowner Super Saver scheme.

Michael Nasser 26:42
Cool. All right. That’s nice and simple. The second one, I’ve tweaked it a bit. But if you had $10,000 to invest in right now, what would you do with it?

Paul Benson 26:52
Depends what your financial objectives are, doesn’t it? Be? I’m putting my financial planners hat on there. But let’s have a think if it was me personally, my number one objective at this point is probably travel. Related to be honest, my youngest is finishing year 12 this year. So I’ve got light at the end of the tunnel in terms of school fees, which has been pretty high on the priority list.

Michael Nasser 27:12
On the opposite end of the spectrum, my kids just went on my first books started kindergarten. So I

Paul Benson 27:18
look forward to Yeah, I will I’m at the tail end. So some of them are obvious. top priorities are kind of ticked off for me. And you know, I’d be a pretty rubbish financial planner, if I didn’t have my super sorted out. So I’m feeling pretty comfortable on retirement. So we’ve $10,000 dropped in my lap. Yeah, we’d probably think about travel. And then that being the case, then I’d probably use it within the next 12 months. In which case, the answer to your question is I’d keep it in cash.

Michael Nasser 27:41
All right. And I guess maybe for our listeners, if you were a first-home buyer looking to buy your first home and you had $10,000 thrown on your lap, what would you do? Where would you be investing in to try and maximize, I guess your deposit? Assuming we’re working on this three year model as well because a short term outlook wouldn’t do much I imagined.

Paul Benson 27:58
I can’t give a product specific. But yeah, look, I would use some sort of balanced type fund solution. So that that way, I’m getting a bit better return than what I would get just cash in the bank. Because I’d be pretty confident that over three years, even if one year was down, be pretty unlikely that I’d get a negative outcome over three years. And the most likely outcome is that I probably get 6% 8%, something like that per year, which would be a lot better than what I’d get in the bank. So yeah, with a three year timeframe. That’s where I’d be looking

Michael Nasser 28:28
Cool. For what’s the best way that I can get in touch with you

Paul Benson 28:32
On the socials, LinkedIn is the one that I’m on the most frequent. So if you just look for Paul Benson gardens, financial services, you’ll find me there. I’m on there a fair bit. And of course, by the podcast. So we’ve, we’ve got podcast listeners that we’re talking to. So if you’re ready to explore a different month, check out the financial autonomy podcast as well.

Michael Nasser 28:48
Yeah, and those links will be in the show notes as well, if you want to check them out. Well, thank you so much for your time today. It’s been really insightful. And I’ve got about an hour out of it. And I’m sure our listeners have as well. So thanks so much for your time.

Paul Benson 28:59
Good stuff. Thanks for having me on. Michael, see you.

Michael Nasser 29:04
You’ve been listening to the home run your guide for buying your first home in Australia. This podcast was produced by Lendstreet. Lendsreet is a mortgage broker and home loan specialist that helps first home buyers find the right loan to meet their needs. We know applying for a loan can be overwhelming and complex. So we help guide and support first homebuyers through the process from start to finish. To find out more, head to our website, We’ve also put a link in the show notes. To make sure you don’t miss an episode of the home run. Be sure to subscribe to or follow the show in your podcast app. And while you’re there, please leave us a five-star review. It really helps others find the show. I’m Michael Messer, and we’ll be back next episode covering another step on the journey to owning your first home.